Wow, China and Russia issued an extraordinary joint statement yesterday, with almost 8,000 words when translated into English, and in many ways more important than the famous "no limits" partnership statement in February 2022.
Here are the points that stood out for me.
BUILDING A NEW WORLD ORDER
The statement says that it is an "objective factor" that "the status and strength of emerging major countries and regions in the 'Global South' [are] continuously increasing", and that "the trend of world multipolarity [is] accelerating". This in turn "accelerates the redistribution of development potential, resources, and opportunities in a direction favorable to emerging markets and developing countries, promoting the democratization of international relations and international fairness and justice".
They point out that "countries that adhere to hegemonism and power politics are contrary to this trend, attempting to replace and subvert the international order based on international law with a so-called 'rules-based order'".
Security-wise, the statement says that "both sides believe that the fate of the peoples of all countries is interconnected, and no country should seek its own security at the expense of others' security. Both sides express concern about the current international and regional security challenges and point out that in the current geopolitical context, it is necessary to explore the establishment of a sustainable security system in the Eurasian space based on the principle of equal and indivisible security."
They go on to say that China and Russia "will fully tap the potential of bilateral relations" in order to "promote the realization of an equal and orderly multipolar world and the democratization of international relations, and gather strength to build a just and reasonable multipolar world".
As for the vision of this world order these 2 principles seem to be the foundational ones: 1) An order with no "neo-colonialism and hegemonism" of any kind: "All countries have the right to independently choose their development models and political, economic, and social systems based on their national conditions and people's will, oppose interference in the internal affairs of sovereign countries, oppose unilateral sanctions and 'long-arm jurisdiction' without international law basis or UN Security Council authorization, and oppose drawing ideological lines. Both sides pointed out that neo-colonialism and hegemonism are completely contrary to the trend of the times, and called for equal dialogue, the development of partnerships, and the promotion of exchanges and mutual learning among civilizations." 2) An order based on the UN Charter: "Both sides will continue to firmly defend the achievements of World War II and the post-war world order established by the UN Charter"
EXTREMELY STRONG CONDEMNATION OF THE US
This condemnation starts with the paragraph highlighted above that "countries that adhere to hegemonism and power politics are contrary to [the trend towards a multipolar world order]", and the statement also condemns the fact that these "countries" (i.e. mostly the US) are "attempting to replace and subvert the international order based on international law with a so-called 'rules-based order'".
They also write that "both sides call on relevant countries and organizations to stop taking confrontational policies and interfering in the internal affairs of other countries, undermining the existing security architecture, creating 'small yards with high fences' among countries, provoking regional tensions, and advocating for camp confrontation."
They further say that "both sides oppose the hegemonic actions of the United States to change the balance of power in the Northeast Asia region by expanding its military presence and forming military blocs. The US, with its Cold War mentality and camp confrontation model, puts 'small group' security above regional security and stability, endangering the security of all countries in the region. The US should stop such actions."
On top of that the statement speaks of "serious concern about the United States' attempts to undermine strategic stability to maintain its absolute military superiority, including building a global missile defense system and deploying missile defense systems around the world and in space, strengthening the ability to disable the opponent's military actions with precision non-nuclear weapons and 'decapitation' strikes, enhancing NATO's 'nuclear sharing' arrangements in Europe and providing 'extended deterrence' to specific allies, constructing infrastructure in the South Pacific Nuclear-Free Zone treaty member Australia that could be used to support US and UK nuclear forces, engaging in US-UK-Australia nuclear submarine cooperation, and implementing plans to deploy and provide land-based intermediate-range and short-range missiles to allies in the Asia-Pacific and Europe."
The statement also condemns "the United States' unconstructive and hostile 'dual containment' policy towards China and Russia": "The United States' actions of conducting joint exercises with its allies ostensibly aimed at China and Russia and taking steps to deploy land-based intermediate-range missiles in the Asia-Pacific region have raised serious concerns for both sides. The United States claims it will continue these practices with the ultimate goal of establishing routine missile deployments worldwide. Both sides strongly condemn these actions, which are extremely destabilizing to the region and pose a direct security threat to China and Russia, and will strengthen coordination and cooperation to respond to the United States' unconstructive and hostile 'dual containment' policy towards China and Russia."
On Asia-Pacific specifically they write that "both sides oppose the creation of exclusive and closed group structures in the Asia-Pacific region, especially military alliances targeting any third party. Both sides point out that the US "Indo-Pacific Strategy" and NATO's attempts to take destructive actions in the Asia-Pacific region have negative impacts on the peace and stability of the region."
They also "demand that the United States refrain from engaging in any biological military activities that threaten the security of other countries and regions" and they oppose the "use [of] outer space for armed confrontation and oppose the implementation of security policies and activities aimed at achieving military advantage and defining outer space as a 'combat domain.'"
Lastly the statement condemns "the US and its allies' deterrent actions in the military field, provoking confrontation with the Democratic People's Republic of Korea, and exacerbating tensions on the Korean Peninsula, potentially leading to armed conflict", and asks that "the United States and NATO, as the responsible parties for the 20-year invasion and occupation of Afghanistan, should not attempt to deploy military facilities in Afghanistan and its surrounding areas again but should bear primary responsibility for Afghanistan's current economic and livelihood difficulties, bear the main costs of Afghanistan's reconstruction, and take all necessary measures to unfreeze Afghanistan's national assets."
ENORMOUS EXPANSION OF CHINA-RUSSIA COLLABORATION
This will be my last point, the statement has an immense list - dozens and dozens of items - of expanded cooperation fields between both countries.
These are some of the most important ones:
- Military cooperation: "[both sides] will further deepen military mutual trust and cooperation, expand the scale of joint training activities, regularly organize joint maritime and air patrols, strengthen coordination and cooperation within bilateral and multilateral frameworks, and continuously improve the ability and level of jointly responding to risks and challenges."
- More trade, mutual investments and help each other economic development: "continuously expand the scale of bilateral trade", "continuously improve the level of investment cooperation between the two countries", and "jointly develop advanced industries, strengthen technical and production cooperation, including in the civil aviation manufacturing industry, shipbuilding industry, automobile manufacturing industry, equipment manufacturing industry, electronics industry, metallurgical industry, iron ore mining industry, chemical industry, and forest industry"
- Cooperation on energy: "consolidate the strategic cooperation in energy between China and Russia and achieve high-level development, ensuring the economic and energy security of the two countries. Strive to ensure the stability and sustainability of the international energy market, and maintain the stability and resilience of the global energy industry chain and supply chain." Also nuclear energy: "deepen cooperation in the field of civilian nuclear energy based on the experience of successful and ongoing projects, including thermonuclear fusion, fast neutron reactors, and closed nuclear fuel cycles"
- Promote each others' currencies and financial infrastructure: "Increase the proportion of local currency in bilateral trade, financing, and other economic activities. Improve the financial infrastructure of the two countries, smooth the settlement channels between the two countries' business entities, strengthen regulatory cooperation in the banking and insurance industries of China and Russia, promote the sound development of banks and insurance institutions established in each other's countries, encourage two-way investment, and issue bonds in the financial markets of each other's countries in accordance with market principles."
- Deep education and scientific cooperation: "promote the expansion and improvement of quality in mutual study abroad programs, advance Chinese language teaching in Russia and Russian language teaching in China, encourage educational institutions to expand exchanges, cooperation in running schools, conduct high-level talent joint training and scientific research, support cooperation in basic research fields between universities, support activities of alliances of similar universities and high schools, and deepen cooperation in vocational and digital education"
- Cooperation in the media and shaping public opinions: "Strengthen media exchanges between the two countries, promote mutual visits at various levels, support pragmatic and professional dialogues, actively carry out high-quality content cooperation, deeply explore the cooperation potential of new media and new technologies in the field of mass media, objectively and comprehensively report major global events, and spread true information in the international public opinion field."
- Cooperation within global institutions: "deepen bilateral cooperation [at] the UN General Assembly and the Security Council", "supporting the role of the World Health Organization", "strengthen cooperation within the WTO framework", "cooperation within the framework of the Shanghai Cooperation Organization (SCO)", "uphold the BRICS spirit, enhance the BRICS mechanism's voice in international affairs and agenda", etc.
I could go on and on, the scale of the cooperation they detail is absolutely breathtaking, both countries are going all in with each other.
This statement is absolutely extraordinary and will likely shape the world for decades to come. We now have Russia and China explicitly stating they're all in with each other to bring about a new "equal and orderly multipolar world and the democratization of international relations", and put an end to US hegemonic behavior. No more pretend, it's happening.
That's the link to the statement, by the way (in Chinese, I couldn't find a version in English): chinanews.com.cn/gn/2024/05-16/…
On Ukraine, this part of the statement may be significant: "Russia positively evaluates China's objective and fair position on the Ukraine issue and agrees with the view that the crisis must be resolved on the basis of full compliance with the UN Charter."
Because "full compliance with the UN Charter" would imply respecting Article 2 on territorial integrity...
Let's see... Apparently Xi and Putin had an "in-depth exchange of views on the Ukraine crisis" with Xi quoted as wanting "an early political settlement of the Ukraine issue" so we'll likely see some initiatives around this.
The statement also says that "both sides believe that to steadily resolve the Ukraine crisis, the root causes of the crisis must be eliminated, the principle of indivisible security must be upheld, and the reasonable security interests and concerns of all countries must be taken into account."
"The root causes", from China and Russia's perspective, of course being NATO expansion and the attempt to transform Ukraine into a western bulwark against Russia. Does this mean that if these "root causes" are "eliminated" (presumably meaning that Ukraine becomes neutral), then Russia would agree to withdraw its troops, i.e. an agreement similar to the one that was almost signed in Istanbul in March 2022? I don't know, again let's see...
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This "China is depleting the oceans with its huge fishing fleets" story is yet another utterly shameless piece of propaganda when China actually proportionally fishes much less than the rest of the world, since - unlike others - it gets the immense majority of its fish supply from aquaculture 👇 (src: openknowledge.fao.org/items/06690fd0…)
The worst culprit when it comes to depleting the oceans is actually Europe, relative to its population size. They fish about 33kg of fish per person per year compared with 10kg for China, a crazy 230% more!
Actually if you read the report it's 13 million tones for China x.com/realSandkraken… Which corresponds to 14.3% of global captures of aquatic animals, which is less than Europe with 15.2 million tones or 16.7% of global captures. This is of course despite China having twice Europe's population...
In other words, Europe has 9% of the world's population but fishes 16.7% of the fishes while China has 18% of the world's population but fishes 14.3% of the fishes.
Now you tell me who is overfishing and who isn't...
Can you even read a graph? China is fishing only about a third the amount of the rest of Asia (13 million tones for China vs 30 million tones for the rest of Asia) 🤷♂️
If anyone wonders how to constitute the China allocation of their portfolio, these tickers, based on seating arrangements, are probably not a bad place to start.
That was actually the basic strategy of a friend of mine, very successful investor in China: he simply studied policy statements very deeply as well as signals like this meeting 👇 to understand what were China's strategic economic objectives and which companies would benefit from this. Just like the US has a "don't fight the fed" investment principle, China has in some way a "don't fight the government" equivalent.
Wow, this is huge. I just tried it myself with a foreign phone number (you can apparently choose any country, see screenshot) and it's true: you can now join Douyin - the Chinese version of TikTok - as an international user.
Which means the Great Firewall is coming down in the most unexpected way: with the world joining the China side of the wall.
Really feels like a Berlin wall moment, except in the opposite direction.
For people wondering where the hell I found the app, given it's not on Western app stores: apkpure.com/douyin/com.ss.…
Zero "TikTok refugee" on here so far that I've seen, pure Chinese content
This 👇 is arguably an even bigger Sputnik moment for China than the 6th generation fighter jet: a Chinese AI Model called DeepSeek v3 rivals - and often surpasses - the latest ChatGPT and Claude models in pretty much all respects for a tiny fraction of the training cost (only $5.5m), and it's open sourced (meaning anyone can use, modify, and improve it).
The fact that it's so cheap to train is particularly important as it completely changes the game of who can participate in advanced AI development. Up until now, the assumption was that you needed hundreds of millions or even billions of dollars to train such a model, yet DeepSeek did it with just $5.5m, a sum of money accessible to just about any startup anywhere. Concretely, this means that DeepSeek has just proven that serious AI development is not limited to tech giants.
And their model is not only cheap to train, it's also extremely efficient to run. They use an architecture called Mixture-of-Experts (MoE) where, while their full model has 671 billion parameters (which is huge), it only uses 37 billion at a time. To compare, Meta has 405 billion parameters in their latest Llama3.1 model and uses all 405 billion at a time. DeepSeek V3 is more than 10 times more efficient, yet performs better than Llama3.1 at almost all benchmarks (English, Math, Coding, etc.).
DeepSeek V3's performance at key benchmarks is impressive across the board:
- Crushes advanced math problems (90.2% on MATH-500, vs 78.3% for Claude-3.5-Sonnet and 74.6% for GPT-4o)
- Excels at coding (82.6% on HumanEval, vs 81.7% for Claude-3.5-Sonnet and 80.5% for GPT-4o)
- Can process huge amounts of text at once (128K tokens, roughly equivalent to 100,000 words in English)
- Processes text at 60 tokens per second, about twice faster than GPT-4o
And the craziest part is that it's open-source, meaning that:
- Anyone can download and study the code
- Developers can modify and improve it
- Companies can integrate it into their products without paying API fees
- The entire AI community can learn from it
Lastly, this obviously comes during an interesting context in China-US relations where the US is doing its utmost to prevent China from progressing technologically, especially in AI. As such, this is an absolutely beautiful response by China: "despite all your restrictions, we just built a world-class AI model for 1% of your cost, made it more efficient than anything you have, and open-sourced it for the whole world to use."
It's also a triumph of brains over money and raw power: with its restrictions the US placed China in a situation where it had to use resources more intelligently. As the saying goes "necessity is the mother of inventions"... And here we now are: China may have just changed the rules of the game forever, democratizing the very technology the US tried to restrict and proving, once more, that human ingenuity always finds a way.
Interesting background on the company behind the model 👇
This 👇 potentially changes everything, it looks like Trump envisions a U.S.-China G2.
He says that "China and the United States can together solve all the problems in the world". x.com/kyleichan/stat…
From the point of view of a citizen of the Earth, I'm all for an improved relationship between the U.S. and China. And so far, despite some of his hawkish appointments, all of the statements by Trump himself point to that. Actions must follow of course, which is anything but a given: U.S. rhetoric often bears little correlation to their actions...
From the point of view of a European though, a US-China G2 would be a strategic disaster of the highest order. In fact it's long been something that many European strategic thinkers have warned about: if a US-China G2 materializes without Europe at the table, it will be on the menu.
A U.S.-China G2 would effectively mark an end to the undeclared world war we've been witnessing these past few years and declare the U.S. and China to be the 2 winners, setting the new rules of the game together the way the winners of WW2 did. Europe had a De Gaulle and a Churchill back then to defend its interests, there's virtually no-one today...
Which is why I've long said it was so strategically dumb for Europe to blindly follow the U.S. in its hostile strategy against China as one day (which looks like it may be coming soon) the U.S. would be bound to flip its position, leaving Europe exposed and with a damaged relationship with China. The smarter approach would have been to maintain an equally balanced relationships with both powers while building up European strategic autonomy. Instead of following Washington's lead on chip restrictions, decoupling initiatives, and confrontational rhetoric, Europe could have carved out its own path...
The question now is whether Europe can still recover its strategic position. And unfortunately the challenge appears nearly insurmountable: years of strategic complacency have left Europe vulnerable at precisely the moment when strength and independence are most crucial, with a complete absence of leaders of the caliber needed to navigate such tricky waters...
Love how this is already being mischaracterized by "China watchers" as Trump playing into Beijing's hands: the "G2 that Xi Jinping has hoped for". x.com/BonnieGlaser/s…
When actually the concept of a G2 originates from the very heart of the U.S. establishment, from people like Fred Bergsten, Zbigniew Brzezinski and Kissinger: en.wikipedia.org/wiki/Group_of_…
And China has actually historically been very critical of it, even rejecting the very concept. Here's for instance what Chinese Premier Wen Jiabao told Barack Obama when the idea was floated during his administration (gov.cn/ldhd/2009-11/1…): "The main reasons we don't agree with the concept of a 'G2' are: First, China is a developing country with a large population, and we remain clear-headed about the long road ahead to build a modernized nation; Second, China pursues an independent and autonomous peaceful foreign policy and does not ally with any country or group of countries; Third, China maintains that world affairs should be decided jointly by all countries, not dictated by one or two countries." (original Chinese: 我们不赞成有关"两国集团"提法的主要原因是:第一,中国是一个人口众多的发展中国家,要建成一个现代化国家还有很长的路要走,对此我们始终保持清醒;第二,中国奉行独立自主的和平外交政策,不与任何国家或国家集团结盟;第三,中国主张世界上的事情应该由各国共同决定,不能由一两个国家说了算)
And again now we have the proposal coming from the U.S., not China, and we can quite safely assume it will likely again face quite a lot of opposition from China.
This is crazy... So let me get this right:
- Yoon lost recent parliamentary elections
- He's invoking national security to justify emergency powers
- He's labeling the opposition as North Korean sympathizers
- He is strongly aligned with US policy (even strengthening ties with Japan, which is deeply unpopular with the population)
This sounds like a bad remake of the classic transitions to right-wing military dictatorship we saw in so many US vassals during the cold war.
Hopefully South Korea will be strong enough to prevent history from repeating itself...
Couldn't be more appallingly undemocratic: martial law can be lifted by a vote in parliament but he's blocking access to it 👇